Hong Kong heaves a sigh of relief with trade rebound

Exports and imports surge 15.2% and 14.9%.

According to Hang Seng Bank's Hong Kong Economic Monitor, the country's trade activity, which had been on a consistently weakening trend since the start of 2012, seemed to have improved in September. This has alleviated concerns of a sharper slowdown in the local economy.

Here's more from Hang Seng Bank:

Exports and imports rose 15.2% and 14.9% in September respectively, after posting meager growth of 0.6% and 0.9% in August.

Overall, trade figures improved moderately in the third quarter, with exports and imports rising 3.8% and 4.5% after advancing by 1.8% and 2.1% in the second quarter.

The rebound was primarily driven by the acceleration in exports to Asian countries, which accounted for more than 90% of the incremental improvement. Shipments to the Mainland accelerated to 25.5% in September, in line with mainland China’s recent stabilisation of growth momentum. For Asia as whole, exports grew 20.1%.

While demand from the US also rose, that to Europe continued to fall, as the continent remained mired in recession.

While the rebound in September’s exports was welcome news, it may have exaggerated the extent of the improvement. Seasonal factors are likely to have played a role, as Mainland had a week-long public holiday in early October which could have caused frontloading of shipments in September.

We also note that a sharp rise in orders for electronic products, a main driver for September’s exports, was helped to some extent by the launch of several major tech products in October. As the beneficial effects from these one-time factors diminish, trade figures could see some pullback in coming months.